Forbes India: “Francisco D’Souza is Reinventing Cognizant, the Role of the CEO, and the Industry Itself”

In a cover story on Cognizant CEO, Francisco D’Souza, Forbes India magazine writes, “How do you explain the motivation of a man who’s got the gumption to hand over everything he helped build over the years to his team, follow instinct, and throw himself into unchartered territory? In Francisco’s mind, there seemed no other way to build a framework that puts everything at stake, including his own future and that of his firm. It isn’t the kind of thing most people we know of do.”

The magazine is referring to D’Souza’s decision to relinquish charge of daily operations and focus instead on the future, entrusting the responsibility of managing the here and now to a core team of three senior leaders—Gordon Coburn, President; Rajeev Mehta, Group Chief Executive, Industries and Markets, and R. Chandrasekaran, Group Chief Executive, Technology and Operations.

“I realized we hadn’t been paying enough attention to emerging technologies,” says D’Souza. “Intellectually we understood what needed to be done. If you lay out the case, any rational person will say it makes sense. The problem was when it came to day-to-day choices. If there is a choice between visiting an important client for existing business today or spending time on the new business, that is the moment of truth. Too often, you make the choice for the short term,” he adds.

“We are a revenue focused company, our margins are lower than our peers, and when you have that model people get too focused on growth,” says Coburn. “If you look at the landscape of IT industry, it is littered with companies that did so well that they went out of business.”

“In our view, 2012 is a very important year, just like 1999 (when the internet era was born) and 1992 (when ERP was created). We are seeing a new IT architecture, no one knows what it is called as yet, but it will change this industry,” says Malcolm Frank, Executive Vice President of Strategy.

The magazine writes, “Because nobody knows what lies ahead, Francisco D’Souza recently formed a new business group called emerging business accelerators (EBA) with a simple mandate: Incubate new businesses around emerging technologies. The EBA now has 18 new businesses with D’Souza leading four. Inside Cognizant there is near consensus that if anyone can pull this off, it is D’Souza.”

The magazine adds, “At the core of the division that D’Souza will drive now, is a venture capital firm-like structure, which would identify, fund and nurture new ideas and business opportunities. D’Souza picked some of the most entrepreneurial leaders from Cognizant to aid him, and each of them would be in charge of four or five business options, each run by a mini CEO. Vertical heads from the core businesses would not only guide these mini CEOs, they would also part-fund them.”

In underscoring how D’Souza “goes boldly where other CEOs don’t”, the magazine points out that while most of D’Souza’s peers reacted by tightening their belts and cutting investments when the crisis at Lehman Brothers erupted, Frank did something else. “He asked his top team to convene in a hotel at Frankfurt Airport,” the magazine writes. “He pored over every unit’s revenue and profitability numbers and then sent out a clear brief. The crisis was an opportunity and Cognizant wouldn’t cut down. Instead, it would invest in businesses for the future. Everybody would spend more time with customers, spend more on marketing, and invest in new businesses. D’Souza told them that everybody, including him, would go out and meet every single one of their clients and partners.” Mehta recalls, “Clients finally stopped seeing us less as cost arbitrage providers and more as partners.”

“His [D’Souza’s] youth and energy are a big advantage,” says Lakshmi Narayanan, D’Souza’s predecessor and now Vice Chairman at Cognizant.